Follow the Leader …

May 28, 2013

Gold is the driver of the precious metals complex.

However, since November we see that another metal is showing leadership.

We all know that since November gold went on to print a failed yearly cycle low in April.
Palladium went on to print a right translated intermediate cycle that printed a probable yearly low in April.

So let’s take a closer look at Palladium’s weekly cycle.

Palladium printed a yearly cycle low last July. That was followed by a shortened 14 week intermediate cycle. The following weekly cycle balanced out the shortened one by printing a slightly extended 24 week intermediate cycle low in April. The April weekly low is also probably the yearly cycle low. Palladium needs to break above the previous monthly high on 781.00 to form a monthly swing low.

So palladium is displaying a bullish divergence over gold

So while gold did print a right translated daily cycle and is currently struggling to find its footing in its second daily cycle …

We see that palladium has printed two right translated daily cycles since the presumed April yearly low. And now has broke out to a new high in its third daily cycle.

So palladium is clearly leading precious metals out of the yearly cycle low.
It will only be a matter of time before gold follows suit.
And when it does, it will make up for lost ground …

7 responses to “Follow the Leader …”

washington23

May 28, 2013

Any thoughts about the dollar action today?

Reply
1. likesmoneystudies
  
  May 29, 2013
  
  washington23,
  
  The dollar looks to be trying to form a top here.
  I believe that their is a real battle going on here with the Bulls & Bears
  
  Day 17 formed a swing high and of course Tuesday, day 19 reversed that swing high. There is a lot of congestion which we can appear at turning points. This sort of reminds me of the dollar back in early January.
  
  After a pretty strong rally, the dollar began to get congested at the 81.50 level.
  
  The bulls managed to pierce the 81.50 level and then was exhausted and the bears took control. Also notice that there was a day 15 peak that resulted into a left translated failed daily cycle.
  
  Reply
  1. likesmoneystudies
    
    May 29, 2013
    
    By the way, it looks like I may be right regarding bonds.
    We have been discussing the possibility of a failed yearly bond cycle.
    
    https://likesmoneycycletrading.wordpress.com/2013/05/19/like-clock-work/
    
    Well bonds broke below the previous intermediate cycle low on Tuesday in a clear and convincing way. At the minumum we have a failed intermediate bond cycle that at week 10 could see another 8 – 12 weeks to the downside.
    
    Now if March was, in fact, the yearly cycle low, then bonds face another 8 – 12 months of downside …
    
    And, you may recall that March not only looks like the yearly low, but also the three year cycle low. A failed intermediate cycle kicking off a yearly and three year cycle would be disastrous for bonds.
    
    Right now I am trying to keep an open mind to the possibility that March was not the yearly cycle low but this an extended yearly cycle.
IheartMrs.Seaver

May 29, 2013

Wonderful observation regarding palladium.

Reply
chrys

May 29, 2013

hey LM great work. Could you make a quick comment about Bonds. Noticed that TNX (US bonds yield) spiked yesterday. This happend a couple of times in recent history most notabley March/April 2012. Shortly after which the SPX made a significant top. Wondering if this is likely to happen again at this juncture. TIA

Reply
1. likesmoneystudies
  
  June 2, 2013
  
  chrys,
  
  The SPX is close to a significant top. The current 4 year cycle is setting new highs at 50 months. I think that we will see one more daily cycle that will roll over quickly.
  
  Reply
washington23

May 29, 2013

Thanks LM!

Reply